China's reforms, more openning-up to foreign investment boost G20 goals

BUENOS AIRES - China's recent decision to deepen supply-side structural reforms and open up more to foreign direct investment (FDI) is in line with G20 goals to improve the global economy, according to a leading Argentine economist and political observer.

"That is consistent with the decision made at the last G20 gathering (in Hangzhou, China), where the document, signed by all parties and promoted by (Chinese) President Xi Jinping, raised awareness about the global oversupply of manufacturing commodities," said Gustavo Girado, head of the Buenos Aires-based consulting firm Asia & Argentina (A&A).

"China's new supply-side policy ... is in the global interest in preventing (commodity) prices from dropping further, by restricting the international supply of these products," Girado told Xinhua in an interview recently.

Following last week's Central Economic Work Conference, a national policy meeting held annually, Beijing announced it will continue to advance supply-side structural reforms in 2017.

The world's second-largest economy said it will seek to make headway in five key reforms over the coming year, including reducing excess production capacity, and lowering company costs, among others.

China also said it will strive to attract foreign investment in 2017 by bolstering the rule of law in business and allowing foreign-owned companies to play a larger role in the economy.

"Among developing countries, China continues to be the leading destination for foreign direct investment," Girado said.

What's special is that China in 2014 became "a net exporter of capital" for overseas investment or loans, he said.

"For an economy that was severely impoverished 60 years ago, and where a substantial proportion of its population was very rural, turning into a net exporter of capital, shows the extraordinary speed at which it developed. It's unprecedented," said Girado.

To further its goal of establishing a "moderately prosperous society" by 2020, "China is spurring the entry of foreign investment," especially in the areas of innovation and technology.

Such foreign investment, he said, is not for "exporting from China, like 30 years ago, but for taking advantage of China's domestic market for high-technology products."